Unified Messaging: Where's the Market?

Deep-pocketed investments in the unified messaging platform are a sure sign that vendors have confidence in some type of all-in-one, message-retrieval system. But key questions are dogging the emerging platform, which by many measures remains an infant in the wireless realm:

* What kinds of systems will end users get?

* Your new unified messaging system may have all of the bells and whistles, but what will your customers really use?

* How much will they be willing to pay for it?

Although vendors are moving forward with developments, some carriers still are looking for answers to these questions. The answers may be a long way off. Most carriers just now are attempting to understand unified messaging and its influence on wireless. What's more, the industry still is coming to grips with the technology involved and its cost.

The platform is so new that some wireless representatives have pleaded ignorance to the unified- messaging concept. Often, those who were aware would only say their companies were actively investigating the platform while politely refusing to discuss the time or money invested -- let alone speculate about a product roll-out.

"At this point it's still so preliminary and a little too far out on the horizon for us to make any predictions," said Melissa Nichols, a Comcast Cellular spokesperson. "A lot of it is in the pioneering stages."

Spokesperson Andrea Linskey said Bell Atlantic Mobile currently is building a business case for unified messaging. But until that business case is complete, "I wouldn't feel comfortable discussing it, which I think speaks to the infant nature of all this."

Yet there appears to be little debate about market potential. By some estimates, unified-messaging mailboxes will top 10 million in 2001 -- with conservative revenue estimates nearing $5 billion.

DEFINING THE MARKETThe industry has a lot of work to do to make those predictions a reality. The basic definition of unified messaging still is being shaped. By most measures, the platform allows customers to grab all of their messages -- from e-mail, voice mail, fax and pager -- from a single source, such as a wireless handset, a desktop PC or a laptop.

But even that definition is shaky, based on uncertain market demands.

"Part of the problem with market acceptance of unified messaging is that it means different things to different people," said Art Rosenberg of the Unified Messaging Consortium (UMC). "It needs to be redefined in terms of individual usage, rather than generically at the enterprise level. From the enterprise technology perspective, (unified messaging) should really be considered as the next generation of voice mail, which not only provides traditional voice-messaging functions, but also enables e-mail to be equally real-time accessible and responsive."

During fourth quarter 1998, Rosenberg's group announced market-study findings that shed some light on implementation issues. A survey of 40 organizations found that, on average, 30% of individuals belonging to mid- and large-size companies have an immediate need for unified messaging. Of that percentage, the biggest demand was from "telephone-centric" and "fax-centric" users, who also may need real-time access to e-mail.

But the survey revealed that some capabilities that many believe to be the hallmarks of the unified-messaging platform -- such as unified desktop retrieval of all messages types -- aren't considered critical by all users.

Bell Canada is marketing a Simply One Number service for the residence/consumer market, using a single number for the home phone and a wireless phone. By ringing both numbers at once, the home user can be reached whether at home or away, and all caller messages go to one mailbox. Bell Canada also announced plans to offer network-based screening/filtering and routing services based on adaptive software.

Lucent Technologies announced a unified-messaging product developed with Bell Canada, Message Notifier, which uses ADSI telephone screen interfaces and Lucent's IMA Messaging Link to support management of voice mail and Internet e-mail messages.

TeleBot is promoting a voice-mail dispatch service that receives voice messages at an extension on the company's phone number and forwards them to a customer's e-mail account as a sound-file attachment.

Unified messaging could have a staggering influence on the paging industry, observers say. About 55 million pagers are in use in the United States -- a number that could top 66 million in the next six years. The rise of advanced paging services likely will offset recent drops in the average amount of monthly revenue per subscriber.

Companies such as TekNow are counting on their systems to help that boost. TekNow has several deals for its paging software, which sends messages from one device to another over the Internet. One of TekNow's biggest deals was a contract with long-distance giant AT&T for its PhenX Internet Paging Gateway, which lets users send e-mail messages to AT&T paging subscribers.

TekNow also has signed an agreement with Motorola to implement the industry's first 2-way input protocol.

REACHING THE MARKETTrials showcased at UMC's conference indicated that the big unified-messaging users rely heavily on Internet and fax access. But the industry needs better personal communications management and automated communications systems to support user preferences, said David Zimmer, also of the consortium.

For example, dramatic swells in personal-message traffic would make important message notification and delivery-service features useless without personalized screening and filtering, Zimmer said.

At November's conference, Zimmer called on the industry to develop software that would erase the need to manually program the handling of incoming calls and messages.

"There is no way that most users can take the time or accurately specify various forms of multimedia access," he said. "We need 'intelligent' software that will observe and learn individual preferences under different conditions and dynamically implement them automatically."

Other factors also will play a role in unified messaging's development, including emerging technologies such as video, which can be handled on innovative wireless devices. In a recent bulletin-board posting at the consortium's web site, Zimmer questioned how the mix of messages would be handled. He said applications such as paging, calendars, business productivity tools, document management and workflow all need to be integrated into the umbrella of unified messaging.

"Add to that the concept of call-control (or communications-control) management," Zimmer said. "Messages (or) calls come into the mailbox. Rather than simply being stored in the mailbox, some calls/messages based upon my criteria would be forwarded directly to me and the device I currently have with me. The message should be 'formatted' appropriately for the device. That simple statement implies the network knows my location, the device I have, its characteristics and how to format the message."

Other factors also will shape unified messaging's position in the marketplace, according to the consortium.

* Packaging, cost structures and billing will be key for providers.

* Service providers won't offer identical capabilities but will have to focus on personalizing their communications features and options to reduce customer churn.

* Speech technologies such as text-to-speech and speech-recognition software will play crucial roles in supporting cross-media messaging and button-free usage by mobile users.

* Consumer and home use are perhaps unified messaging's biggest targets, but strategies such as using the platform to get e-mail and reply by voice from a phone are key to penetrating that market.

* Incoming fax retrieval is "a principal source of real cost-savings for users, in addition to enhanced message-management capabilities," Zimmer said. "Pro-active message notification and delivery, as opposed to simple retrieval, is critical."

* Directories are key to automating the personalization of intelligent communications services.

The industry also needs more standards to achieve "universal accessibility and connectivity across systems and networks." Though such improvements are seen as key to speeding the benefits of unified messaging to customers, it's clear the industry is confident about demand.

Telinet Technologies, which markets MediaMail -- software allowing users to retrieve e-mail, voice and fax messages through a phone, e-mail application or a web browser -- won a $250,000 investment in May 1998 from venture capital firm Imlay Investments. Telinet also has received a multimillion-dollar investment from Nortel, which uses MediaMail.

Telecom giant MCI unveiled its unified-messaging product, MCI Contact, last year. MCI Contact personalizes daily and weekly schedules and can find the user at up to three phone numbers.

Smaller companies also are taking early steps to the market. Russell Walker, First Step Telecom president, markets the Electronic Secretarial Administrator (ESA). For $30 per month, ESA provides access to an 800 number. The system charges 9.9cents a minute for the first incoming call, with additional legs costing 5cents a minute.

"So if you were to call me, and ESA had to find me (with one leg), it would cost me 14.9cents," Walker said.

The system frees him from having to spend money on extra lines for phone and fax, an attractive option for small businesses. But prices may need to come down before most users will buy into the concept.

Market-research data showed that costs for unified- messaging features ranging from $5 to $15 per month were acceptable to users. Despite the cost hurdle, Walker, who markets ESA primarily to anyone who demands remote message retrieval, is convinced unified messaging will take off.

"People are getting sick of handing out business cards with 20 or more different numbers on them," he said. "I think the unified-message system really targets the home office and small offices that can't afford PBX systems."

Recent trials by GTE using PulsePoint's unified-messaging product found the platform appealed to 62 % of SOHO users and 29 % of home-only users. The trial targeted SOHO and small business customers who owned PCs running Windows 95 and subscribed to GTE's Internet and wireless services.

But just how soon other companies join the market is uncertain. Carriers such as Comcast remain in the research stages, though it is expected they'll eventually move forward with commercial offerings.

"It's the way the industry is moving, in the same way that the DOS system evolved into Windows, where you were still integrating all of those different components but you're still using just one screen," said Comcast's Nichols. "It will be something that will be important to the wireless industry."